Ten years ago when he was approaching 63, William Randolph Hearst began integrating his $220,000,000 empire of 28 newspapers, 13 magazines, eight radio stations, two cinema companies and vast real estate holdings for current business reasons and so that it should be more wieldy for his heirs and executors. Last week Hearst profits were examined by such divergent publications as FORTUNE* and the New Masses, but nowhere could anyone read what Publisher Hearst intends shall become of his empire after his death. On that point even his lawyer and grand vizier, San Francisco's John Francis Neylan, professes utter ignorance.
A far smaller publisher than Hearst, and only approaching 60, is Frank Ernest Gannett. But last week he made news by announcing what shall happen after his death to his $8,000,000 kingdom of 19 newspapers, one magazine.
In Rochester, N. Y. high-minded, unspectacular Publisher Gannett announced formation of the Frank E. Gannett Newspaper Foundation Inc. Profits of the Gannett chainpapers, which have averaged $800,000 over the past ten years and reached a Depression high of $848,925 in 1934, will be used primarily to keep his properties alive and prosperous, on the theory that no press can be free which is not financially independent. What profits are not needed to bolster business will be devoted exclusively to "general philanthropic" work in the cities where the papers are published.
The eleven directors of the Foundation, chiefly major Gannett executives, will serve for life, elect their own successors. The Foundation will hold a controlling majority of the common (voting; stock, all of which is now held by Publisher Gannett. Prime consideration of the directors will be to pay dividends on the preferred stock, which is owned largely by employes, executives and the public. After a cash reserve (not to exceed $100,000) has been set up, not less than 75% of the net income each year must be distributed to charity.
Unlike Mr. Hearst, who has five grown sons, Publisher Gannett at 59 has only one son, Dixon, aged 6. His daughter Sara ("Sally") at 12 has no ambition to run a chain of newspapers, even the Gannett chain, which, unlike others, virtually runs itself. Publisher Gannett has provided for his family independently of the Foundation, in which they have no interest, but he has no intention of leaving his son & heir a large fortune.
Most curious thing about the Gannett papers is that they follow no set mold, have no common editorial or typographical formula. Each was a growing concern when Publisher Gannett bought it (average age: 75 years). Each is permitted to continue virtually without interference as an individual newspaper reflecting local conditions and sentiment. Only common denominator of the Gannett papers is that each aims to be as clean, honest and wholesome as its Unitarian publisher.